Where assessee-company owned several motor cars, 80 per cent of insurance value of motor cars to be accepted for wealth tax purpose instead of written down value of these cars.
Facts:
a) The assessee-company owned several motor cars and offered 80 per cent of the insurance value of the motor cars for wealth-tax purpose instead of their written down value;
b) The Assessing Officer (‘AO’) held that the method used by the assessee was not acceptable because as per the Wealth-tax Act the valuation of the motor vehicles is based on the written down value, i.e., considering the wear and tear and usage of the same. Therefore, he, accordingly, made addition to the net wealth of assessee;
c) On appeal, the Commissioner of Wealth-tax (Appeals) upheld the order of AO. The aggrieved-assessee filed the instant appeal.
The Tribunal held in favour of assessee as under:
1) The value of motor cars shown in their insurance policies had to be taken as the basis for determining their market value;
2) However, as the insurance company would also take other things into consideration in arriving at a particular value for the purpose of insurance, market value of motor cars could be reasonably estimated at 80 per cent of their insurance value;
3) Therefore, the AO was to be directed to take 80% insurance value of the cars shown by the assessee for wealth tax purpose. - Zee Entertainment Enterprises Ltd. v. Assistant Commissioner of Wealth-tax [2013] 40 taxmann.com 74 (Mumbai - Trib.)
Facts:
a) The assessee-company owned several motor cars and offered 80 per cent of the insurance value of the motor cars for wealth-tax purpose instead of their written down value;
b) The Assessing Officer (‘AO’) held that the method used by the assessee was not acceptable because as per the Wealth-tax Act the valuation of the motor vehicles is based on the written down value, i.e., considering the wear and tear and usage of the same. Therefore, he, accordingly, made addition to the net wealth of assessee;
c) On appeal, the Commissioner of Wealth-tax (Appeals) upheld the order of AO. The aggrieved-assessee filed the instant appeal.
The Tribunal held in favour of assessee as under:
1) The value of motor cars shown in their insurance policies had to be taken as the basis for determining their market value;
2) However, as the insurance company would also take other things into consideration in arriving at a particular value for the purpose of insurance, market value of motor cars could be reasonably estimated at 80 per cent of their insurance value;
3) Therefore, the AO was to be directed to take 80% insurance value of the cars shown by the assessee for wealth tax purpose. - Zee Entertainment Enterprises Ltd. v. Assistant Commissioner of Wealth-tax [2013] 40 taxmann.com 74 (Mumbai - Trib.)
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